Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
GMO - Very Bearish - FWIW hope not much
Old 07-27-2021, 06:14 AM   #1
Recycles dryer sheets
 
Join Date: May 2019
Posts: 154
GMO - Very Bearish - FWIW hope not much

https://www.marketwatch.com/story/gr...ts-11627061555

Grantham talking about -8% losses in coming years.....
MichealKnight is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-27-2021, 06:28 AM   #2
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Chicagoland again!
Posts: 35,273
How about a snippet, summary or at least a comment on why we should read this article, and what makes it different from this other recent thread on Jeremy Grantham https://www.early-retirement.org/for...ok-109970.html
MichaelB is offline   Reply With Quote
Old 07-27-2021, 06:36 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 6,332
Interesting article/perspective, but like all other market analyst, they don't know what's going to happen. I'm less concerned about such market losses over an extended period of time and much more concerned about the buying power of my money deteriorating.
__________________
You know you are really drunk when you hold on to the grass to keep from falling off the Earth.
Car-Guy is offline   Reply With Quote
Old 07-27-2021, 06:40 AM   #4
Recycles dryer sheets
 
Join Date: May 2019
Posts: 154
Here's a snippet, summary, and *another* comment about the article....as far as why readers should read it, I will leave that up to the reader - they are capable of deciding:
Sorry that my sole comment was on forecasted 8% losses -- as an investor/retiree losses of such magnitude - was slightly relevant to me.

https://www.marketwatch.com/story/gr...ts-11627061555

"Big losses ahead for markets? Jeremy Grantham’s terrifying new forecasts"


"In the case of some of these mainstream investments, the predicted losses are huge. Those 8% and 8.5% annual losses on U.S. large-caps and small-caps? If they happen, they’ll mean your SPDR S&P 500 ETF SPY, +0.25% and Vanguard S&P 500 Trust VOO, +0.25% and Schwab U.S. Small-Cap ETF SCHA, +0.31% lose about half their value, in inflation-adjusted terms, by 2028."

The opinion piece also lists some instances where GMO was right.
MichealKnight is offline   Reply With Quote
Old 07-27-2021, 06:46 AM   #5
Recycles dryer sheets
 
Join Date: May 2019
Posts: 154
Hello Car-Guy...

I'm hardly an acolyte of GMO - as a novice investor I'm really an acolyte of nothing .

Of course I am concerned about my future purchasing power to and I guess to me - a huge part of that is whether my investments earn 5%, or lose 8%. Agreed - nobody knows totally what is going to happen and yes, a broken clock is right twice per day.....this Grantham on one hand would've missed so much bull market....but, more than once was right in predicting things that nobody else really was thinking about.

I'm not posting it out of agreement, just for thinking and discussion sake
MichealKnight is offline   Reply With Quote
Old 07-27-2021, 06:46 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Aug 2016
Location: Northern Virginia
Posts: 3,544
Grantham is a permabear. If you predict enough gloom and doom, eventually it will look like you were "right" if you ignore that you were wrong 99 percent of the time.

Having said that, long-term bull markets do not start from where we are now. I think it is logical to expect below-market average returns over a decade or so in the future. My guess is that decade or so will begin when the Fed tightens and the market has a resulting "reckoning" to re-price risk.

Not sure when that will happen but it is a concern.
Montecfo is offline   Reply With Quote
Old 07-27-2021, 07:10 AM   #7
Full time employment: Posting here.
 
Join Date: Oct 2015
Posts: 631
I wish I was as smart as these "experts" and then I would know what to do!

When I read articles like this, I try and remind myself that there is a reason I have a diversified plan and then take another look at this pretty chart...

https://theinsuranceproblog.com/wp-c...00-to-2019.png

Someone tell me what to do!
DawgMan is offline   Reply With Quote
Old 07-27-2021, 07:47 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 30,006
Quote:
Originally Posted by Montecfo View Post
Grantham is a permabear. If you predict enough gloom and doom, eventually it will look like you were "right" if you ignore that you were wrong 99 percent of the time.

Having said that, long-term bull markets do not start from where we are now. I think it is logical to expect below-market average returns over a decade or so in the future. My guess is that decade or so will begin when the Fed tightens and the market has a resulting "reckoning" to re-price risk.

Not sure when that will happen but it is a concern.

Totally agree with the bolded sentence above. Only the Reddit crowd would think stocks will go to the moon from here.

Not much I can do other than taking a more defensive stance, such as cutting back my stock AA. And being an active investor, I will continue trying to get a few percent each year via option trading as I have done. Will not get me rich, but when returns are lousy every percent helps.
__________________
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
NW-Bound is online now   Reply With Quote
Old 07-27-2021, 10:21 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 30,521
Quote:
Originally Posted by MichealKnight View Post
https://www.marketwatch.com/story/gr...ts-11627061555

Grantham talking about -8% losses in coming years.....
Grantham is always super bearish, except about timber.

Quote:
Originally Posted by Montecfo View Post
Grantham is a permabear. If you predict enough gloom and doom, eventually it will look like you were "right" if you ignore that you were wrong 99 percent of the time.

Having said that, long-term bull markets do not start from where we are now. I think it is logical to expect below-market average returns over a decade or so in the future. My guess is that decade or so will begin when the Fed tightens and the market has a resulting "reckoning" to re-price risk.

Not sure when that will happen but it is a concern.
Also generally agree with this, especially the bolded part.

I’m on the defensive end of my range with my AA and have been for many years, but I remain invested.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 07-27-2021, 10:28 AM   #10
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 3,192
Quote:
Originally Posted by MichealKnight View Post
The opinion piece also lists some instances where GMO was right.

emphasis by me. All these doom and gloom article predictors are right sometimes, and wrong many other times. Out of how many multiple times do they predict crash and pullback, they only need to get it right once and they claim to be accurate. Not my definition of accurate prediction. I'll stay invested in the market over the long term, it's done well for me over 35 years so far.
__________________
The advice we're giving you is invaluable, that's why it's free
Experience is a good teacher, but the tuition can get expensive real fast

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 07-27-2021, 11:03 AM   #11
Confused about dryer sheets
 
Join Date: Jul 2021
Posts: 1
I have been investing for 40 years and I have heard these same types of predictions again and again. These oracles of prediction have a remarkable ability to craft a plausible sounding scenario that is only exceeded by their ability to be spectacularly wrong. I know some people won’t believe me when I say this so let’s try a thought experiment:

It’s February 9, 2020, the SP500 just hit a high of 3,380.

You get a message from the future about the economy but unfortunately, it’s cut off before the end, so you only get to read what’s going to happen but not what the impact on the markets are.

“The world will soon enter a global pandemic which is still continuing. People will be locked down in the houses for months on end, unemployment will soar, schools will be closed. There will be shortages of basic materials, international travel will shut down, sporting events won’t have any crowds. Hundreds of thousands of people will die in the US and millions will die around the world. The government will borrow trillions of dollars to try to save the economy causing inflation to soar. There will be anti-police riots across the US. Many stores will be looted and burned”

Think about what your reaction would have been.

What would you have expected to stock market to be 18 months later? Would it have been “logically” the time to sell? If someone else said, after reading the same text, that the SP500 would go up around 30%, would you have believed them or would you have thought them insane? Whose advice would have made you richer?

I am not saying the market had to go up, as you know it crashed and recovered but it could have stayed down for a long time. What I am saying is that no one knows what is going to happen. The market may crash, boom or go sideways but it won’t be accurately predicted by anyone.
Ultrac is offline   Reply With Quote
Old 07-27-2021, 11:44 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Sep 2006
Posts: 2,670
From the article:

GMO said it has three actions it advises to clients traversing in a global growth bubble:
1) exploit the bubble with an equity long/short strategy
2) avoid the bubble by investing in alternatives
3) concentrate assets away from the bubble in emerging market value, Japan small value, cyclicals, and quality.
"We are loath to recommend a traditional 60/40 mix. There will come a day when global equities and government bonds are fairly valued and should deliver a "normal" real rate of return," it said. On that day, GMO will be the first in line to tell you to own that traditional mix."
__________________
ERD 50

https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
Running_Man is offline   Reply With Quote
Old 07-27-2021, 02:44 PM   #13
Recycles dryer sheets
 
Join Date: Jan 2013
Posts: 131
The projected outcome may be right or wrong, but Grantham uses historical valuations and performance to reach his conclusions. Based on that, I think it makes a lot of sense to consider what he has to say. The sample size of "long term" market performance so many rely upon is incredibly small to me so I'm a proponent if you've won the game then stop playing. Consider Japan from 1989 - over three decades of a bear market that is still down 30% from it's high. Nobody knows how the Fed can ever unwind it's enormous balance sheet and while government spending has been out of control for decades, trillions have replaced billions in proposed spending of money we don't have. Nobody knows how any of this will turn out but I know I don't have a 30 year career ahead of me earning money so I'm keeping that in mind more than ever.
enjoyinglife102 is offline   Reply With Quote
Old 07-27-2021, 07:20 PM   #14
Dryer sheet aficionado
 
Join Date: Aug 2018
Posts: 43
Quote:
Originally Posted by Montecfo View Post
Grantham is a permabear. If you predict enough gloom and doom, eventually it will look like you were "right" if you ignore that you were wrong 99 percent of the time.

Having said that, long-term bull markets do not start from where we are now. I think it is logical to expect below-market average returns over a decade or so in the future. My guess is that decade or so will begin when the Fed tightens and the market has a resulting "reckoning" to re-price risk.

Not sure when that will happen but it is a concern.
You posted what I was going to say. Eventually he'll be right (so is a broken clock twice a day) and then the financial media will say oh what a great call that was.
Graybeard is offline   Reply With Quote
Old 07-27-2021, 07:25 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jan 2018
Location: Tampa
Posts: 8,606
Just another permabear.
What is his return vs. the SP500 over the last 20 years?
__________________
TGIM
Dtail is offline   Reply With Quote
Old 07-29-2021, 11:44 AM   #16
Thinks s/he gets paid by the post
GravitySucks's Avatar
 
Join Date: Feb 2014
Location: Syracuse
Posts: 3,043
Quote:
Originally Posted by Montecfo View Post
Grantham is a permabear. If you predict enough gloom and doom, eventually it will look like you were "right" if you ignore that you were wrong 99 percent of the time.

Having said that, long-term bull markets do not start from where we are now. I think it is logical to expect below-market average returns over a decade or so in the future. My guess is that decade or so will begin when the Fed tightens and the market has a resulting "reckoning" to re-price risk.

Not sure when that will happen but it is a concern.
But he predicted the last two bear markets....and twelve other bear markets.
Staying the course cause nobody knows nothin.
__________________
“No, not rich. I am a poor man with money, which is not the same thing"
GravitySucks is offline   Reply With Quote
Old 07-29-2021, 11:56 AM   #17
Full time employment: Posting here.
 
Join Date: Dec 2016
Posts: 555
Quote:
Originally Posted by Dtail View Post
Just another permabear.
What is his return vs. the SP500 over the last 20 years?

Exactly
__________________
Retired 1/6/2017 at 50 years old
Immensely grateful


“The most important quality for an investor is temperament, not intellect.”—Warren Buffett
FREE866 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
FWIW - US Federal Debt (65.5T) exceeds world GDP shotgunner FIRE Related Public Policy 5 03-11-2009 08:10 AM
Does anyone own a Long/Short Fund like GGHEX - GMO Alpha Only Fund III fatman22 FIRE and Money 3 01-15-2009 08:02 AM
failed rally = very bearish signal? wabmester FIRE and Money 7 05-18-2006 04:38 PM
GMO 7-Year Asset Class Return Forecast Spanky FIRE and Money 2 01-02-2006 09:43 AM

» Quick Links

 
All times are GMT -6. The time now is 10:45 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.